News & Releases
ITT Announces Solid Results for 2013 Second Quarter
Thursday, 1 Aug 2013
2013 operating performance drives increase in guidance for revenue and adjusted EPS
Revenue grew 9 percent to $609 million, with organic revenue up 2 percent, representing strength across key geographies and end markets
GAAP earnings from continuing operations increased to $0.27 per share
Adjusted earnings from continuing operations increased 4 percent to $0.51 per share
Adjusted segment operating income expanded 15 percent and margins expanded by 70 basis points due to volume and productivity gains
New increased 2013 guidance ranges announced: total revenue 10 to 11 percent, organic revenue 3 to 4 percent and adjusted earnings $1.86 to $1.92 per share
WHITE PLAINS, N.Y., Aug. 1, 2013 – ITT Corporation (NYSE: ITT) today reported that second-quarter 2013 total revenue grew by 9 percent to $609 million with 2 percent organic growth (defined as total revenue excluding foreign exchange, recent acquisitions and divestitures).
ITT’s total revenue results reflect gains in key geographies, including 13 percent growth in Western Europe and 12 percent growth in emerging markets. These increases were driven by automotive gains and the performance of its Bornemann Pumps acquisition. In the second quarter, ITT achieved organic growth of 12 percent in the global automotive brake pad market and 19 percent in global energy, which were offset by a 35 percent decline in global mining.
On a GAAP basis, segment operating margins improved by 10 basis points. Adjusted segment operating margins, which exclude special items, expanded by 70 basis points, reflecting net operating productivity and increased volume partially offset by the Bornemann Pumps operations and the funding of strategic investments.
Second-quarter GAAP earnings from continuing operations increased to $0.27 per share. Adjusted earnings from continuing operations, which excludes special items, increased 4 percent to $0.51 per share, reflecting a 15 percent increase in adjusted segment operating income that was partially offset by a higher effective tax rate and the impacts of favorable prior-year corporate items.
“ITT has consistently executed our strategies to drive profitable growth and value creation, and the first half of 2013 was no exception,” said Denise Ramos, chief executive officer and president. “In both quarters, we continued to drive market expansion with strong growth in emerging markets, winning share in a tough Western European environment and enhancing our presence in key global end markets such as energy and automotive.
“We’re supporting that growth longer-term by making strategic customer-focused investments globally including expanding our automotive capabilities in China and enhancing our oil and gas capabilities in Korea and the United States. At the same time, our intense focus on execution is helping us continually improve productivity, key customer metrics and margins. All of these efforts represent sustainable achievements that position us well to continue to deliver strong results for the remainder of 2013 and beyond.”
The company also has continued to return cash to shareholders through $85 million in share repurchases year-to-date.
2013 Second-Quarter Business Segment Results
All results are compared with the prior-year second quarter
designs and manufactures industrial pumps and valves for the oil and gas, chemical, mining and industrial markets.
2013 second-quarter total revenue was up 15 percent to $269 million. The growth reflects a 40 percent increase in organic global oil and gas shipments and the impact from the company’s successful acquisition of Bornemann Pumps. Organic revenue was down 1 percent compared to the prior year due to global mining declines. Organic orders were up 8 percent due to solid project activity, primarily in the oil and gas market, and total backlog has increased 10 percent in 2013.
Adjusted operating income increased 9 percent to $31 million, reflecting strong operating productivity that was partially offset by the funding of a strategic expansion in our oil and gas capabilities.
designs and manufactures braking technologies and shock absorbers for the automotive and rail markets.
2013 second-quarter total revenue increased 11 percent to $171 million and organic revenue increased 9 percent driven by 12 percent growth in global automotive brake pads. The results reflect a strong performance in Western Europe, where revenue was up 9 percent despite difficult markets, as well as 70 percent growth in China. These gains were partially offset by unfavorable automotive shipment timing in North America and weakness in the global rail shock absorber market.
Adjusted operating income increased by 26 percent to $25 million. The gain reflects volume increases, net operating productivity and operational improvements in the KONI shock absorber business, partially offset by pricing and an unfavorable sales mix.
designs and manufactures connectors and interconnects for the aerospace, industrial and transportation markets.
2013 second-quarter total revenue for Interconnect Solutions was flat at $100 million, with organic revenue up 1 percent, as strength in defense and general industrial connectors was offset by a difficult comparison in oil and gas connectors.
Adjusted operating income was up 31 percent to $8 million, as net operating productivity, restructuring savings and higher volumes were partially offset by unfavorable sales mix.
In the quarter, Interconnect Solutions continued making progress on efforts to enhance its focus on harsh environment connector applications in key end markets and improve global efficiency. As a result of those efforts, the business marked its third consecutive quarter of sequential order growth.
designs and manufactures products including fuel management, actuation, and noise and energy absorption components for the aerospace and industrial markets.
Second-quarter total revenue decreased 2 percent to $70 million and organic revenue decreased 1 percent as growth in North American and European aerospace was offset by anticipated declines related to the fulfillment of an aerospace program and weakness in the global general industrial and defense markets.
Adjusted operating income increased 7 percent to $15 million, as net operating productivity and impacts from pricing initiatives were only partially offset by unfavorable sales mix and volume.
ITT’s operating performance in the first half of 2013 drove the company’s decision to raise its guidance for full-year revenue and adjusted earnings per share. The revised revenue guidance ranges include increasing expectations for total revenue growth to 10 to 11 percent from 9 to 11 percent and organic revenue growth to 3 to 4 percent from 2 to 4 percent. Adjusted EPS guidance was increased to a range of $1.86 to $1.92 from a previous range of $1.80 to $1.90. The revised adjusted EPS guidance reflects a mid-point that is $0.04 higher than the prior mid-point as well as 12.5 percent higher than the prior year’s adjusted EPS.
Investor Call Today
ITT's senior management will host a conference call for investors today at 9 a.m. EDT to review performance and answer questions. The briefing can be monitored live via webcast at the following address on the company's Web site:
For a reconciliation of GAAP to non-GAAP results, please visit the company’s Web site by